10/23/25, 6:13 AM Edexcel A-level Economics Paper 2 Exam (2025) UPDATE Verified Questions And Answers | With 100% Correct Answers graded …
Edexcel A-level Economics Paper 2 Exam (2025)
UPDATE Verified Questions And Answers | With
100% Correct Answers graded A+ Guaranteed
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Terms in this set (262)
The study of the economy as a whole, including
Macroeconomics
inflation, growth and unemployment.
The total of all demands or expenditures in the
Aggregate demand
economy at any given price.
Shows the relationship between the price level and
Aggregate demand curve equilibrium national income. As the price level rises
the equilibrium level of national income falls.
Business confidence: the mood of managers and
Animal spirits owners of firms about the future of their industry and
the wider economy.
The addition to capital stock, both to replace the
Gross investment existing capital stock which has been used up
(depreciation) and the creation of additional capital.
Investment The addition to the capital stock of the economy.
Profit kept back by a firm for its own use which is not
Retained profit
distributed to shareholders or used to pay taxation.
Net exports or the net Exports minus imports.
trade balance
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,10/23/25, 6:13 AM Edexcel A-level Economics Paper 2 Exam (2025) UPDATE Verified Questions And Answers | With 100% Correct Answers graded …
The relationship between the average level of prices
Aggregate supply curve
in the economy and the level of total output.
The level of output where no
extra production can take place
in the long run with existing
resources. The full capacity level
Full capacity of output for an economy is
shown by the classical long run
aggregate supply curve or the
vertical part of a Keynesian
aggregate supply curve.
Short-run aggregate The upward sloping aggregate supply curve which
supply curve assumes that money wage rates are fixed.
Factors such as changes in wage rates or commodity
Supply-side shocks prices which cause the short run aggregate supply
curve to shift.
A model of the economy which shows the flow of
Circular flow of income goods, services and factors and their payments
around the economy.
Closed economy An economy where there is no foreign trade.
Rent, interest, wages and profits earned from wealth
Income
owned by economic actors.
In the circular flow of income, spending which is not
Injections generated by households including investment,
government spending and exports.
The value of the output, expenditure or income of an
National income
economy over a period of time.
An economy where there is trade with other
Open economy
countries.
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A stock of assets which can be used to generate a
flow of production or income. For example, physical
Wealth
wealth such as factories and machines is used to make
goods and services.
In the circular flow of income, spending by
Withdrawals or leakages households which does not flow back to domestic
firms. It includes savings, taxes and imports.
The increase in imports divided by the increase in
Marginal propensity to
income that caused them (i.e. change in M / change in
import (MPM)
Y)
Marginal propensity to The increase in saving divided by the increase in
save (MPS) income that caused it (i.e. change in S / change in Y)
The increase in tax revenues divided by the increase
Marginal propensity to tax
in income that caused them (i.e. change in T / change
(MPT)
in Y)
The increase in withdrawals from the circular flow (S +
T + M) divided by the increase in income that caused
Marginal propensity to
them (i.e. change in W / change in Y); this is the same
withdraw (MPW)
as the sum of the marginal propensity to save, tax and
import (MPS + MPT + MPM).
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Edexcel A-level Economics Paper 2 Exam (2025)
UPDATE Verified Questions And Answers | With
100% Correct Answers graded A+ Guaranteed
Success!!
Save
Terms in this set (262)
The study of the economy as a whole, including
Macroeconomics
inflation, growth and unemployment.
The total of all demands or expenditures in the
Aggregate demand
economy at any given price.
Shows the relationship between the price level and
Aggregate demand curve equilibrium national income. As the price level rises
the equilibrium level of national income falls.
Business confidence: the mood of managers and
Animal spirits owners of firms about the future of their industry and
the wider economy.
The addition to capital stock, both to replace the
Gross investment existing capital stock which has been used up
(depreciation) and the creation of additional capital.
Investment The addition to the capital stock of the economy.
Profit kept back by a firm for its own use which is not
Retained profit
distributed to shareholders or used to pay taxation.
Net exports or the net Exports minus imports.
trade balance
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,10/23/25, 6:13 AM Edexcel A-level Economics Paper 2 Exam (2025) UPDATE Verified Questions And Answers | With 100% Correct Answers graded …
The relationship between the average level of prices
Aggregate supply curve
in the economy and the level of total output.
The level of output where no
extra production can take place
in the long run with existing
resources. The full capacity level
Full capacity of output for an economy is
shown by the classical long run
aggregate supply curve or the
vertical part of a Keynesian
aggregate supply curve.
Short-run aggregate The upward sloping aggregate supply curve which
supply curve assumes that money wage rates are fixed.
Factors such as changes in wage rates or commodity
Supply-side shocks prices which cause the short run aggregate supply
curve to shift.
A model of the economy which shows the flow of
Circular flow of income goods, services and factors and their payments
around the economy.
Closed economy An economy where there is no foreign trade.
Rent, interest, wages and profits earned from wealth
Income
owned by economic actors.
In the circular flow of income, spending which is not
Injections generated by households including investment,
government spending and exports.
The value of the output, expenditure or income of an
National income
economy over a period of time.
An economy where there is trade with other
Open economy
countries.
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, 10/23/25, 6:13 AM Edexcel A-level Economics Paper 2 Exam (2025) UPDATE Verified Questions And Answers | With 100% Correct Answers graded …
A stock of assets which can be used to generate a
flow of production or income. For example, physical
Wealth
wealth such as factories and machines is used to make
goods and services.
In the circular flow of income, spending by
Withdrawals or leakages households which does not flow back to domestic
firms. It includes savings, taxes and imports.
The increase in imports divided by the increase in
Marginal propensity to
income that caused them (i.e. change in M / change in
import (MPM)
Y)
Marginal propensity to The increase in saving divided by the increase in
save (MPS) income that caused it (i.e. change in S / change in Y)
The increase in tax revenues divided by the increase
Marginal propensity to tax
in income that caused them (i.e. change in T / change
(MPT)
in Y)
The increase in withdrawals from the circular flow (S +
T + M) divided by the increase in income that caused
Marginal propensity to
them (i.e. change in W / change in Y); this is the same
withdraw (MPW)
as the sum of the marginal propensity to save, tax and
import (MPS + MPT + MPM).
https://quizlet.com/1097277301/edexcel-a-level-economics-paper-2-exam-2025-update-verified-questions-and-answers-with-100-correct-answers-gra… 3/27
